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The Hamiltonian Newt

By Timothy Birdnow, Special to CHQ | 12/11/10

The first political party to ascend to power in these United States was the Federalists. The party of Washington, John Adams, and Alexander Hamilton may have had a strong pedigree among the Founding Fathers, but it did not have an enduring one; it was gone shortly after the War of 1812 (which most Federalists opposed) and had been seriously waning in influence even before that.

Originally, a Federalist was anyone favoring ratification of the Constitution, but it came to mean those favoring a strong central government over a more confederated system. The creation of the First Bank of the United States saw a number of the original Founders split to form the Democratic-Republican Party, the party of Jefferson, Madison, J.Q. Adams, Henry Clay, and James Monroe. Be it duly noted that James Madison had been an ally of Alexander Hamilton and co-author of the Federalist Papers, but he broke with Hamilton as the Federalist Party promoted strong central government, aristocratic privilege, and government support for business.

According to Mark J. Fitzgibbons at Conservative HQ, when asked if policies he advocates would grow government, the former House Speaker had this to say:

“[T]here’s nothing to restrain a President from doing something dumb, but I trust the people in this room to tell me if that is the case.” But then he noted more seriously that, “I’m a Federalist. I look to the Federalist Papers and the Constitution to guide me and restrain government.”

In addition, according to Fitzgibbons,

"Newt later said that he is a Federalist more in the mold of Alexander Hamilton, and even indicated by a nod of the head that Cuccinelli and others in the room may have views more like the Anti-Federalists such as Thomas Jefferson.

Given Speaker Gingrich’s expertise in American history, his choice of Hamilton is no mere throwaway clue to how he would govern."

This is an interesting course to chart for a former history professor; Gingrich must surely be aware that the current Democratic Party more nearly resembles the Federalists than does the GOP, and that the Federalists had a short run.

Remember, America had fought a war to be free of intrusive government, and people like Hamilton sought to re-impose a similar system. The Federalists believed in a ruling class, with the aristocracy running things. They believed in centralization of money and power.

And they sought to regulate private business. For instance, John Adams signed the Act for the Relief of Sick and Disabled Seamen which required a surcharge on merchant ships for medical care and hospital services for seamen. (It has been wrongly argued as justification for Obamacare's individual mandate.) He also signed the Alien and Sedition Act, something clearly extra-constitutional -- particularly the Sedition Act which made criticisms of elected officials a crime. (Federalists controlled the House of Representatives by a margin of 60 to 48, and the Senate 22 to 9.)

And the Federalists began the national debt; that was a project conceived by Alexander Hamilton.

The public quickly soured on them, and they were soon consigned to the ashbin of history. It is interesting to note that the last vestiges of Federalism were in the Northeast, current home to Progressive Democrats today.

This is what Newt Gingrich thinks is conservative? A government loving, robber-baron coddling, xenophobic, war protesting (they bitterly opposed the War of 1812 and many called for secession from the union as a result) band that had little electoral success; John Adams was their last president and the entire party went Kaput only a few years later.

And Hamilton argued in The Federalist Papers that the Judicial Branch would be largely harmless, not having money of its own or enforcement powers. Hamilton was astonishingly wrong on any number of issues involving the growth of government. Is Newt Gingrich suffering from the same malady?

The centerpiece of the Federalist program was the central bank. It's interesting to note that Gingrich had close ties with Freddie Mac, the quasi governmental agency at the heart of the housing bubble collapse.

"There are many things that are frightening about Gingrich’s remarks. First, they are for Freddie Mac who paid him something around $1.6 million for his “services.” He described this work originally as being payment for his historical knowledge of housing. Cue laughter, folks. This interview gives you a glimpse of the real reason he was hired. He was hired, of course, to provide cover for Freddie Mac. Freddie Mac was a GSE, a government-sponsored enterprise. A GSE was quasi-private or quasi-public, take your pick. Freddie (and Fannie Mae) bought mortgages from originators and brokers. They provided “liquidity” for the housing market which is a fancy way of saying that they increased the amount of credit available. For a long while, they were relatively benign."

And Gingrich made the following remarks in an interview about Freddie "Corleone" Mac:

Q: A key element of the entrepreneurial model is using the private sector where possible to save taxpayer dollars and improve efficiency. And you believe the GSE model provides one way to use the private sector.

Gingrich: Some activities of government – trash collection is a good example – can be efficiently contracted out to the private sector. Other functions – the military, police and fire protection – obviously must remain within government. And then there are areas in which a public purpose would be best achieved by using market-based models. I think GSEs provide one of those models. I like the GSE model because it provides a more efficient, market-based alternative to taxpayer-funded government programs. It marries private enterprise to a public purpose. We obviously don’t want to use GSEs for everything, but there are times when private enterprise alone is not sufficient to achieve a public purpose. I think private enterprise alone is not going to be able to help the Gulf region recover from the hurricanes, and government will not get the job done in a very effective or efficient manner. We should be looking seriously at creating a GSE to help redevelop this region. We should be looking at whether and how the GSE model could help us address the problem of financing health care. I think a GSE for space exploration ought to be seriously considered – I’m convinced that if NASA were a GSE, we probably would be on Mars today.

This bespeaks a man who believes in Progressive ideals but wants government to empower intermediaries rather than do the job itself. And don't think that the Obama Administration won't use this against Gingrich in the general election. Their convenient amnesia, their forgetting that Barney Frank was a huge player in this, will disappear as the esteemed Mr. Frank is retiring and they are now free to tar the GOP with the housing meltdown even further.

Frankly, we don't need a marriage made in hell like that of government with quasi-private entities. There is a word for that; it's called Fascism. If Gingrich sees that as a useful or good thing then he is not the man to lead America back from the precipice. We need someone who believes government is a fearful master, one to be chained.

"Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”—that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions."

Doesn't that sound rather like the "Big Government Conservatism" that was and is espoused by the elites in the GOP? Granted, it sounds even more like the policies actually implemented by Barack Obama, but it is troublesome nonetheless. If Mr. Gingrich actually believes in partnering government and industry, he shares more in common with the Progressives or their kissing cousins the Fascists than with the Conservatives of our day. WE are the Jeffersonians. The disciples of Hamilton have morphed into Democrats.

Do we really want a choice between two Democrats?

Timothy Birdnow is a St. Louis based writer. His website is www.tbirdnow.mee.nu

I agree,excellent article.Hamilton made everyone pay back the revolutionary debt on standard percentage even though certain States had already paid most of the debt,thus forcing the other States to pay a share of the deadbeat States.I knew we were in trouble when corporations like Blackwater(now XE services)started charging big bucks to do what the armed forces were supposed to do.Blackwater did not have to follow the rules that the military does as a civilian outfit in a war theatre so they raped children,tortured and killed people with no consequences.That is why Erik Prince changed the name of the company.The sad part is that these people never got fired and still get the taxdollars today.GSE$Your tax dollars working for evil.